Question 1

In accounting, the rule that requires that assets, services, and liabilities be recorded initially at the cash or cash-equivalent value of what was given up or of the item received is called the ________.

Accepted Answer

Measuremen...

Question 2

An external transaction is an exchange within an entity that may or may not affect the accounting equation.

Accepted Answer

A) True 
 B)False

Question 3

The Sarbanes-Oxley Act (SOX) requires each issuer of securities to disclose whether it has adopted a code of ethics for its senior financial officers and the contents of that code.

Accepted Answer

A) True 
 B)False

Question 4

Another name for equity is:

Accepted Answer

A)   Expenses.
B)   Net assets.
C)   Net loss.
D)   Net income.
E)   Revenue.F) B) and C)
G) B) and D)

Question 5

Which of the following accounting principles prescribes that a company record its expenses incurred to generate the revenue reported?

Accepted Answer

A)   Expense recognition (Matching)  principle.
B)   Going-concern assumption.
C)   Measurement (Cost)  principle.
D)   Consideration assumption.
E)   Business entity assumption.F) A) and B)
G) D) and E)

Question 6

A sole proprietorship is a business owned by one or more persons.

Accepted Answer

A) True 
 B)False

Question 7

How does the objectivity principle support ethical behavior?

Accepted Answer

The objectivity principle supports ethic...

Question 8

Owner's investments are increases in equity from a company's earnings activities.

Accepted Answer

A) True 
 B)False

Question 9

Assets created by selling goods and services on credit are:

Accepted Answer

A)   Equity.
B)   Accounts payable.
C)   Expenses.
D)   Liabilities.
E)   Accounts receivable.F) A) and E)
G) A) and D)

Question 10

Which of the following combinations results does not result in the same amount of net income reported on the income statement?

Accepted Answer

A)   Total revenues of $70,000 and total expenses of $60,000.
B)   Total revenues of $40,000 and total expenses of $20,000.
C)   Total revenues of $80,000 and total expenses of $60,000.
D)   Total revenues of $60,000 and total expenses of $40,000.
E)   Total revenues of $170,000 and total expenses of $150,000.F) All of the above
G) A) and C)

Question 11

The accounting equation is ________.

Accepted Answer

Assets = L...

Question 12

Rent expense appears on which of the following statements?

Accepted Answer

A)   Statement of owner's equity.
B)   Balance sheet.
C)   Statement of periodic expenses.
D)   Income statement.
E)   Statement of cash flows only.F) C) and E)
G) D) and E)

Question 13

The primary objective of managerial accounting is to provide general purpose financial statements to help external users analyze and interpret an organization's activities.

Accepted Answer

A) True 
 B)False

Question 14

Owner's equity is increased when cash is received from customers in payment of previously recorded accounts receivable.

Accepted Answer

A) True 
 B)False

Question 15

The cost-benefit constraint prescribes that only information with benefits of disclosure greater than the costs of providing it need be disclosed.

Accepted Answer

A) True 
 B)False

Question 16

The expense recognition principle, also called the matching principle:

Accepted Answer

A)   Provides guidance on when a company must recognize revenue.
B)   Prescribes that a company report the details behind financial statements that would impact users' decisions.
C)   Prescribes that accounting information is based on actual cost.
D)   Prescribes that a company record the expenses it incurred to generate the revenue reported.
E)   Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.F) B) and D)
G) C) and D)

Question 17

The financial statement that shows the beginning balance of owner's equity; the changes in equity that resulted from new investments by the owner, net income (or net loss) ; withdrawals; and the ending balance, is the:

Accepted Answer

A)   Statement of financial position.
B)   Statement of cash flows.
C)   Balance sheet.
D)   Statement of owner's equity.
E)   Income statement.F) C) and D)
G) A) and B)

Question 18

Revenues are:

Accepted Answer

A)   The excess of expenses over assets.
B)   Resources owned or controlled by a company.
C)   The same as net income.
D)   The increase in equity from a company's sales of products and services.
E)   The costs of assets or services used.F) None of the above
G) B) and E)

Exam 1: Accounting in Business

Owner's investments are increases in equity from a company's earnings activities.

Correct Answer
verified

The cost-benefit constraint prescribes that only information with benefits of disclosure greater than the costs of providing it need be disclosed.

Correct Answer
verified

Which of the following accounting principles prescribes that a company record its expenses incurred to generate the revenue reported?

Correct Answer
verified

Another name for equity is:

Correct Answer
verified

The Sarbanes-Oxley Act (SOX) requires each issuer of securities to disclose whether it has adopted a code of ethics for its senior financial officers and the contents of that code.

Correct Answer
verified

An external transaction is an exchange within an entity that may or may not affect the accounting equation.

Correct Answer
verified

Which of the following combinations results does not result in the same amount of net income reported on the income statement?

Correct Answer
verified

The expense recognition principle, also called the matching principle:

Correct Answer
verified

The accounting equation is ________.

Correct Answer
verified
Assets = L...
View Answer

Revenues are:

Correct Answer
verified

Rent expense appears on which of the following statements?

Correct Answer
verified

In accounting, the rule that requires that assets, services, and liabilities be recorded initially at the cash or cash-equivalent value of what was given up or of the item received is called the ________.

Correct Answer
verified
Measuremen...
View Answer

The primary objective of managerial accounting is to provide general purpose financial statements to help external users analyze and interpret an organization's activities.

Correct Answer
verified

How does the objectivity principle support ethical behavior?

Correct Answer
verified
The objectivity principle supports ethic...
View Answer

A sole proprietorship is a business owned by one or more persons.

Correct Answer
verified

Assets created by selling goods and services on credit are:

Correct Answer
verified

Owner's equity is increased when cash is received from customers in payment of previously recorded accounts receivable.

Correct Answer
verified

The financial statement that shows the beginning balance of owner's equity; the changes in equity that resulted from new investments by the owner, net income (or net loss) ; withdrawals; and the ending balance, is the:

Correct Answer
verified

Exam 1: Accounting in Business

Owner's investments are increases in equity from a company's earnings activities.

Correct AnswerverifiedShow Answer

The cost-benefit constraint prescribes that only information with benefits of disclosure greater than the costs of providing it need be disclosed.

Correct AnswerverifiedShow Answer

Which of the following accounting principles prescribes that a company record its expenses incurred to generate the revenue reported?

Correct AnswerverifiedShow Answer

Another name for equity is:

Correct AnswerverifiedShow Answer

The Sarbanes-Oxley Act (SOX) requires each issuer of securities to disclose whether it has adopted a code of ethics for its senior financial officers and the contents of that code.

Correct AnswerverifiedShow Answer

An external transaction is an exchange within an entity that may or may not affect the accounting equation.

Correct AnswerverifiedShow Answer

Which of the following combinations results does not result in the same amount of net income reported on the income statement?

Correct AnswerverifiedShow Answer

The expense recognition principle, also called the matching principle:

Correct AnswerverifiedShow Answer

The accounting equation is ________.

Correct AnswerverifiedAssets = L...View AnswerShow Answer

Revenues are:

Correct AnswerverifiedShow Answer

Rent expense appears on which of the following statements?

Correct AnswerverifiedShow Answer

In accounting, the rule that requires that assets, services, and liabilities be recorded initially at the cash or cash-equivalent value of what was given up or of the item received is called the ________.

Correct AnswerverifiedMeasuremen...View AnswerShow Answer

The primary objective of managerial accounting is to provide general purpose financial statements to help external users analyze and interpret an organization's activities.

Correct AnswerverifiedShow Answer

How does the objectivity principle support ethical behavior?

Correct AnswerverifiedThe objectivity principle supports ethic...View AnswerShow Answer

A sole proprietorship is a business owned by one or more persons.

Correct AnswerverifiedShow Answer

Assets created by selling goods and services on credit are:

Correct AnswerverifiedShow Answer

Owner's equity is increased when cash is received from customers in payment of previously recorded accounts receivable.

Correct AnswerverifiedShow Answer

The financial statement that shows the beginning balance of owner's equity; the changes in equity that resulted from new investments by the owner, net income (or net loss) ; withdrawals; and the ending balance, is the:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Assets = L...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Measuremen...
View Answer

Correct Answer
verified

Correct Answer
verified
The objectivity principle supports ethic...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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